Coordination of Time-Varying Price Supply Chain with Inequity-Averse Retailers

Abstract EN

In order to coordinate time-varying price supply chain with inequity-averse retailers, this paper proposes a cooperative system decision model based on buy-back contract.

The model concentratedly takes the market demand, manufacturers’ order response time, retailers’ inequity aversion, and time-varying price into consideration.

Through sensitivity analysis of model parameters, the influence of inequity aversion characteristics of retailers on contract parameters is analyzed by a numerical example.

The result reveals that the cooperative system based on buy-back contract can coordinate such supply chains.

And it shows that when the retailer has disadvantageous inequity aversion, the buy-back contract is beneficial to the manufacturer; when the retailer has advantageous inequity aversion, the buy-back contract is beneficial to the retailer.